Diversification - You need "intelligent supervision"

In The Battle for Investment Survival, G. M. Loeb claimed that “Diversification might be necessary where no intelligent supervision is likely”

My take: 
"When in doubt, diversify" 
"The less you know, the more you should diversify."
"Diversification requires investment intelligence."

There is nothing wrong with saying you cannot supervise so you diversify. It is not failure. It is not capitulation, but rather showing the courage of owning your limitations. A false sense of knowledge will often drive active portfolio shares. Think of diversification as the null or starting position with a portfolio. Deviations from the null diversified portfolio require a high hurdle through a strong information advantage relative to the null. 

However, realize that there are a host of different types of diversification. There is not just one answer to the diversification solution because there are often hidden bets in different diversification schemes. 

There can be significant value in the choice of diversification. This choice is related to understanding the implicit bets that are includes in benchmark portfolios. A diversified stock portfolio that is equally weighted is not the same as a cap-weighted diversified portfolio. An equally dollar-weighted portfolio is not the same as an equal risk or equal volatility-weighted portfolio. The portfolio rebalancing strategy, which realigns the diversification, will have different return effects.

There is "intelligent supervision" required even for diversification, so don't take the diversification decision lightly.